Correlation Between CANEX Metals and Quartz Mountain

Can any of the company-specific risk be diversified away by investing in both CANEX Metals and Quartz Mountain at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining CANEX Metals and Quartz Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CANEX Metals and Quartz Mountain Resources, you can compare the effects of market volatilities on CANEX Metals and Quartz Mountain and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in CANEX Metals with a short position of Quartz Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of CANEX Metals and Quartz Mountain.

Diversification Opportunities for CANEX Metals and Quartz Mountain

0.14

Correlation Coefficient

CANEX Metals  Quartz Mountain

Average diversification

The 3 months correlation between CANEX and Quartz is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding CANEX Metals and Quartz Mountain Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quartz Mountain Resources and CANEX Metals is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on CANEX Metals are associated (or correlated) with Quartz Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quartz Mountain Resources has no effect on the direction of CANEX Metals i.e., CANEX Metals and Quartz Mountain go up and down completely randomly.

Pair Corralation between CANEX Metals and Quartz Mountain

Assuming the 90 days trading horizon CANEX Metals is expected to generate 1.33 times less return on investment than Quartz Mountain. In addition to that, CANEX Metals is 1.34 times more volatile than Quartz Mountain Resources. It trades about 0.07 of its total potential returns per unit of risk. Quartz Mountain Resources is currently generating about 0.12 per unit of volatility. If you would invest  46.00  in Quartz Mountain Resources on December 21, 2024 and sell it today you would earn a total of  21.00  from holding Quartz Mountain Resources or generate 45.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

CANEX Metals  vs.  Quartz Mountain Resources

CANEX Metals

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CANEX Metals are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, CANEX Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Quartz Mountain Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Quartz Mountain Resources are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Quartz Mountain showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CANEX Metals and Quartz Mountain

The main advantage of trading using opposite CANEX Metals and Quartz Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CANEX Metals position performs unexpectedly, Quartz Mountain can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Quartz Mountain will offset losses from the drop in Quartz Mountain's long position.

The idea behind CANEX Metals and Quartz Mountain Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.